Virgin Money Investing: High charges and very little choice

If you're an existing, happy Virgin customer and you simply want to get some money into an ISA or personal pension with as little effort and as few decisions as possible, then this could work for you.

For most people, I'd say there are cheaper options out there and, crucially, ones offering more investment options, even if you just want a simple, managed solution.

Virgin Money Investing offers its customers access to a:

• General investment account (GIA) is an account designed to provide access to investments. You may be liable for tax on any income or capital gains earned within a general investment account but this can be a useful vehicle for anyone who has maxed out their ISA allowanceGeneral investment account
• Sometimes called an investment ISA, a stocks and shares ISA is an individual savings account that allows you to invest in shares, unit trusts, investment funds, and bonds. You will not need to pay tax on any income or capital gains earned on investments within an ISAStocks and shares ISA
• Personal pension
• A cash ISA is a type of individual savings account where you can earn tax-free interest on your saved cashCash ISA

General investment account and stocks and shares ISA

It is generally recommended that you only use a general account to invest once you've used up your annual ISA allowance. For the tax year 2024/25 that is £20,000.

We recommend using investing through ISAs first, because of the tax advantages it affords you. ISAs are ‘tax wrappers' – investment accounts which have layers of protection from taxes protection from taxes that are usually levied on returns made in general investment accounts.

ISAs can be either ‘flexible' or not flexible. Virgin Money's ISA is not flexible, which means that if you might need to use your ISA as a source of emergency money, you'll not be able to repay any money you withdraw from it without it counting twice towards your annual allowance. Flexible ISAs allow you to withdraw and repay money without it impacting your annual allowance total.

If you want a flexible ISA, visit our Best Stocks and Shares ISA page for our recommendations.

Assets

Investment choices are very limited with Virgin Money: there are just three ready-made portfolios to choose from. That may suit you well if you are anxious about knowing what specific assets to invest in as the assets within ready-made portfolios are chosen and managed for you. All you need to do is select the one that best matches your appetite for (and tolerance to) risk.

However, just three ready-made funds will certainly be too limited for many people. And if you were hoping to pick and choose your own stocks, bonds or funds, Virgin is not the provider for you.

The three ready-made portfolios on offer are:

• Cautious: Lower risk with lower potential returns
• Balanced: More potential ups and downs but greater potential for higher returns
• Adventurous: ‘Go big or go home' as Virgin puts it. Higher risk but potentially much higher returns

And that's it; those are your choices. If you're looking for a simple, easy, and low-cost way into investing but with slightly more choice and control than is on offer here, I'd suggest looking at Dodl, NatWest, Moneybox or InvestEngine.

Personal pension

With Virgin Money's personal pension, you'll have a choice of either:

• Self-drive, or
• Navigator

With Self-Drive, you have to feel comfortable choosing your own investment fund. You will need to consider which best matches your feelings about risk (how much of it you feel comfortable taking) and how well matched the fund is to your stage of life. If you're close to retirement, you will probably want to limit how much risk you're exposed to, and stick with safer asset classes such as bonds and gilts. There are just four funds to choose from so choices are limited, but still, you'll need to feel happy that you're informed enough to make the right decisions for your retirement plans, and match your current age and risk profile.

Fund options are the same as offered for the ISA but with one additional option:

• Virgin Money Defensive Fund
• Virgin Money Growth Fund 1
• Virgin Money Growth Fund 2
• Virgin Money Growth Fund 3

Performance has not been great on any of these funds (the three growth funds all underperformed the industry average), although it should be remembered that past performance does not predict future performance and we only have three years' data to go on as these funds weren't launched until October 2020.

Alternatively, if you don't want to ‘self-drive', you can choose the ‘Navigator' option. Navigator automatically changes the asset allocation within your portfolio based on your age. Simply put, it will invest your money for growth when you’re younger, and aim for stability as you get older.

Costs for both options are similar (see ‘fees' below).

As this is a personal pension, your account will automatically be credited with tax relief from the government in the form of a 20% bonus on all your deposits.

Cash ISAs

Virgin Money performs better here, with some competitive rates of interest paid on the Easy Access 1-Year Fixed cash ISA, and the Easy Access Exclusive Cash ISA, although the products are only available to customers who have already opened a Virgin Money current account.

Given that there are higher rates of interest available with Trading 212, Plum, Chip and Moneybox – none of which require you to jump through the hoop of opening a bank account with all that involves – it doesn't seem worth going for these Cash ISAs unless you are actually already a Virgin Money banking customer.

There are two other Cash ISAs available to non-customers but, in the case of one, rates are significantly lower, and with the other, you'll be subject to quite strict penalties for withdrawing money from your account.

If you're already a Virgin customer though, and want to keep everything in one place, a Virgin Money Cash ISA is a decent product.

Stocks and shares ISA / general investment account

One simple fee for all: 0.75% of your investment value.

That includes an account fee of 0.30% and ongoing fund fees of 0.45%. That's on the high side as this chart demonstrates:

There are no dealing fees for buying and selling funds, however, and no other hidden costs so it's easy to understand.

Personal pension

If you choose the Navigator pension, you'll be charged between 0.72% – 0.75% per year. The reason for the range is that fees reduce after you reach age 51, as your pension investments change to a less risky asset allocation.

If you choose a Self-Drive pension, then the total charges depend on how you choose to invest your pension. Total charges will be between 0.70% and 0.75% per year.

Withdrawals

Virgin Money doesn't allow withdrawals of amounts less than £50.

Have a question about Virgin Money that we haven't covered? Ask it here and we will get back to you as soon as possible!